Is there such a thing as variable-discount-rate DCF/NPV modeling? Like setting different discount rates for cash flow expected at different times? My discount rate is definitely not fixed.
Conversation
Replying to
I heard about some machine learning systems for video game microtransactions.
They try to figure out what price an individual will pay for an item, and the optimal time/method to show it to them.
Sounds really exploitative and not something that should exist in games.
Replying to
Ya, it’s called Hyperbolic Discounting. Useful explanation for why people don’t do what’s supposedly in their best interests, long-term.
en.wikipedia.org/wiki/Hyperboli
1
1
Replying to
Sure. Discount rates are themselves a theoretical simplification of valuing cash-in-hard different at different times. When you have a better model of your own situation than the default tools would, use the better model.
1



